Because 10% of the amount of USDR minted can be minted with TNGBL there is a need for additional insurance to protect users in the case of 100% redemptions to ensure all users receive $1 worth of DAI back. (See Risks)
Circa 5-10% of the market cap will be held as an insurance fund.
These assets can be utilized in an emergency situation to help with peg or sold to meet redemption requirements.
This is protocol owned value held in a variety of different assets that are acquired to help drive Real USD adoption (BAL, CRV, AURA etc). These assets are acquired via minting of USDR using Tangible labs TNGBL token allocation. When Real USD crosses 100% collateralization excluding TNGBL and the insurance fund, then these assets will be returned to Tangible labs.
New Real USD is not minted against gains in the insurance fund as it is separate to the core protocol and exists merely to provide a buffer during the first few years of the protocol.